The Race Before…

Stocks are running higher hours before a key
corporate earnings report and a key economic policy decision.

The Nasdaq is up 47.17 at 1792.90, the Dow is up 114
at 9437, and the S&P 500 is up 14.68 at 1101.88.

The key December S&P 500 futures contact

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gapped above its 50-day moving average at the start and is holding above the price level of
its opening print. Although more than 80%
of gaps are filled within two days, a hold above 1097 — out of a pullback
— is a constructive sign. Blue-chip indices are rallying out of Pullback
From Highs setups for a third day and the Nasdaq is also up (for a fourth
day), after triggering long above the high of the low bar in the
pullback.

The largest maker of networking gear is slated to
release earnings results after the close of trading today. Last month,
Cisco’s
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CEO John Chambers said the company was on track to meet
analysts’ expectations of two cents a share. Corporate officials are
prohibited from talking about earnings expectations in the weeks immediately
preceding an earnings announcement. Cisco’s price persistency indicates the
Street has conviction the stock will match earnings hopes. Cisco is also
forecast to have had sales of $4.16 billion. Sales in the same period last
year were $6.5 billion.

From an intermediate technical analyst’s view, Cisco
has traced the minimum nine-week base and a consolidation to define a cup-and-handle pattern. The stock popped open and is trading above the
pivot-point trigger of the pattern, up .53 at 17.80.

Only four stocks — Microsoft
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, Intel

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and Qualcomm
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have a larger weighting and impact on the tech-laden Nasdaq 100
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than Cisco.

But other stocks are outperforming the largest
capitalized stocks on the Nasdaq 100, contributing to technology’s continued
outperformance of the blue chips. Siebel
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, Ciena
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and Veritas
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are all up more than 10%.

The Federal Reserve meets tomorrow to adjust its
primary monetary policy tool; the federal funds target interest rate.
Expectations are for a .50% cut in rate to 2%. Short-term interest rates are
already at their lowest level in four decades.

In the sectors, networkers
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, +5.33%,
Internets
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, +4.22%, and biotechs
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, +4.00%, are
the leading sectors. Gold and silver
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, -1.45%, and oil services

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, -2.48%, are the only lagging sectors.